The Skift New Luxury newsletter is our weekly newsletter focused on the business of selling luxury travel, the people and companies creating and selling experiences, emerging trends, and the changing consumer habits around the sector.
Why don’t luxury travel brands resonate among consumers the way that high-end fashion or automobile brands do? As we report in today’s top story, according to Interbrand’s new and closely watched ranking of the world’s top brands, luxury travel names don’t make it into the Top 100.
Now there are some methodological reasons for the exclusion. But methodology aside, the study’s finding may suggest that, particularly in the hotel space, brands aren’t doing enough to distinguish themselves from one another. A Ritz-Carlton feels the same as a Four Seasons, which feels the same as a Sofitel. While Asian luxury hotel brands, as a whole, do have a different feel from their North American- and European-based counterparts when compared to each other, most share similar vibes.
Maybe brand-loyal customers would disagree, but to the average consumer, most luxury hotel companies serve up the same product. On the other hand, serious consumers of high-end fashion can easily distinguish between Chanel and Celine, while any gearhead worth his or her salt can spot the difference between a BMW and a Lexus from miles away. But even from close up, it’s difficult to distinguish a luxury hotel brand.
Oftentimes, when big hotel companies acquire brands, they spend a great deal of time internally taking pains to create individual niches for very similar concepts — here’s looking at you, Marriott. “They don’t want to compete with themselves, so they create false divisions,” said luxury branding expert Daniel André Langer. “They define user groups and create products around them — a rational process, but people aren’t rational consumers.” The internal differentiation makes little difference, because the other major hospitality companies are doing the same thing. That’s why, Langer said, “Hotel brands become empty umbrellas. Everything gets hollow because there is no substance” to brand definitions.
For hospitality brands like Marriott and Hilton, who have previously made the list but whose asset-light strategies work against Interbrand’s financial metrics of brand value, building up loyalty offerings could be the key to boosting brand strength.
— Laura Powell, Skift Luxury Editor
5 Looks at Luxury
Luxury Brand Value Surges — But Lags in Hospitality Sector: Within the travel industry, brands like Ritz-Carlton and Four Seasons loom large. But according to a just-released study of brand valuation, in the real world, hospitality brand names don’t carry as much weight as their high-end counterparts in other industry sectors. To address this, companies like Marriott and Hilton are focusing on establishing ironclad loyalty offerings.
Marriott Drives Deeper Into Luxury Short-Term Rentals As a Loyalty Play: Airbnb has nothing to worry about. Marriott is mainly interested in using rentals as a tool to build brand loyalty. So the Bethesda, Maryland-based hotel giant won’t threaten the established players in short-term rental booking.
Accor CEO to Doubters in Asia: Our Brand-Heavy Strategy Is Working: Having more brands when cheap money is chasing real estate is good for Accor, but may not be for its hotel owners. This is especially true in Asia where owners are hoping that in time it won’t be a case of too many Accor hotels chasing too few hotel guests.
Airbnb Doubles Down on Professional Vacation Rentals in Resort Areas: The online juggernaut isn’t satisfied with dominating urban markets. Airbnb wants to take the beaches and the mountains, too, in the battle for short-term rental bookings. So the company is becoming savvier in how it approaches local property managers.
Marriott is Buying Elegant Hotels in Barbados in Further All-Inclusive Push: Buying Elegant Hotels will add another seven Caribbean hotels to Marriott’s all-inclusive offering. It’s a sure sign that the company is taking this part of the market much more seriously in 2019.
Skift Luxury Editor Laura Powell [firstname.lastname@example.org] curates the New Luxury newsletter. Skift emails the newsletter every Tuesday.